It’s been a rough week for the Consumer Financial Protection Bureau—perhaps the roughest in the agency’s history.
First, the Department of Justice (DOJ) filed court papers asking a federal appeals court to order the restructuring of the CFPB. The DOJ argues that the agency’s structure—outside the purview of congressional oversight—comes into a separation-of-powers issue, since CFPB Director Richard Cordray isn’t sufficiently answerable to the president. (Only the White House can fire Cordray, and only for cause.) In the DOJ’s words: “There is a greater risk that an independent agency headed by a single person will engage in extreme departures from the president’s executive policy.” The Justice Department also emphasized that the president should be able to fire Director Cordray at will.
It only gets worse. Yesterday, the House Financial Services Committee held a hearing called “The Bureau of Consumer Financial Protection’s Unconstitutional Design,” bringing four witnesses to comment on the CFPB’s unconstitutional lack of accountability to the executive branch or elected officials. In one exchange, Rep. Scott Tipton (R-CO) asked Ted Olson, a legal expert, about the agency’s structure. “You have to have accountability,” Olson responded. “[The CFPB] is not accountable to you or the president. Who can control that agency? No one can control that agency.” Olson also noted that he has “never seen the breadth of authority of the CFPB and the lack of oversight and responsibility to Congress in any other agency.”
For Director Cordray, next week can’t come soon enough.